By Nick Lewis
Register News Writer
RICHMOND — If the Richmond City Commission would just take a look in a mirror, they will see who is responsible for a deficit of $1.8 million coming at the end of the 2010 fiscal year. They can’t make excuses or point fingers as they have up to now because this one rests solely on their shoulders. This large deficit simply is a result of their lack of action on expense-saving initiatives submitted last fall at the height of the financial crisis.
Interim city Manger Jimmy Howard put many recommendations in front of the city commission that would substantially have reduced the deficit. They failed to act on every one of them. Had they acted then, the deficit would have been much smaller and much more manageable in addressing budgets for 2011 and beyond.
Based on financial statements, it appears the financial crisis is improving; however, a more detailed analysis presents just the opposite. Documents obtained through open records requests were analyzed in depth using assumptions based on current trends. It is my opinion, using this process, that the city will have a large deficit and that is unacceptable.
What is even more disturbing is that when the following information is applied, the deficit would have been projected over $3 million. Here’s why. The city received $600,000 in back revenue from Richmond Utilities for fiscal years ending 2008 and 2009. It also borrowed $600,000 from a police and fire retirement fund to cover operating costs. This revenue helped mask what would have been a $1.3 million deficit instead of the $128,000 that was reflected on the Dec. 31 financial statements.
As you can see, the financial crisis is not improving and until the city can control its spending, it never will. Large deficits will be the norm because future revenue streams, based on current tax structures and fees, will not substantially increase over time. It will never be enough revenue to sustain current spending trends. It will never put them in a financial position to replenish the investment account which must be done. Reaching financial stability is nothing more than just an understanding of basic math and basic business principles. They must accept the reality of this crisis and just act.
With that being said, this city commission can no longer ignore Howard’s recommendations that will put this city on the right path to turning things around, but the commission chooses to do nothing. They continue to make excuses as well as deny responsibility while placing blame on others at city hall. They are the ones that have the power to turn this city around, but they seem to remain oblivious to what must be done, regardless of who is leading the city.
Finally, given the severity of the financial crisis and the city commission’s failure to implement initiatives that would have reduced this $1.8 million deficit, citizens must seriously question whether these individuals are capable of leading this city now or in the future.
